Displaying items by tag: Commodities

Thursday, 25 March 2021 17:01

Forget WFH, Here is the Next Asset Class to Jump


The onset of the pandemic had weak demand for about every good in the U.S. except…See the full story on our partner Magnifi’s site.

Published in Eq: Energy
Monday, 22 March 2021 16:58

This May Be a Tail Risk for Commodities

(New York)

Commodities have been doing great this year. The big rise in demand coupled with weak supplies because of COVID have led to a surge in prices. However, one bright spot—metals—might have some trouble looming on the horizon. There is increasing speculation that the US may scrap pennies. If that happens, it could put a dent in the copper and zinc markets. This dent would not only come from a lack of new demand, but the fact that pennies would be taken out of circulation and recycled. This would amplify the effect by boosting supply to the system and lowering demand for newly-mined metal.

FINSUM: This might have a strong psychological effect even though the total quantity of zinc from pennies accounts for less than 4% of total annual output.

Published in Eq: Energy


Commodities are doing very well this year. Every big bank, including Goldman Sachs, thinks we may be starting a new commodities super cycle. The big question is exactly which commodities and who will be the big winners. Everything from food, to metals, to oil has been rising and this creates some clear winners, particularly producers of those commodities. That means a big windfall for countries like Saudi Arabia, Australia, and Chile, who are big net exporters of various raw materials. It is net importers that get hurt the worst, with an absolute behemoth—China—likely to suffer the most, as it is one of the largest buyers of commodities in the world. In fact, it almost single-handed drove the big commodities boom in the 2000s.

FINSUM: So the key here is picking the right emerging markets. Additionally, investors may want to double-think investing in oil, as production hikes could undermine prices quickly.

Published in Eq: Energy
Thursday, 11 March 2021 19:02

Goldman Says a New Commodities Boom Has Begun

(New York)

You have probably seen a few articles floating around, but the last several weeks have really hammered it home: we are at the precipice of a new commodities supercycle. The pandemic brought on a huge fall in commodities prices because of a tumble in demand. But as the economy is heating back up, demand is jumping and supply is not matching it. Raw materials demand has surged across the board. Most have been paying attention to oil prices, but check out others like copper and metals. Goldman sees the dawn of a new decade-long demand surge akin to what happened between 2000 and 2010, when the rise of emerging markets/BRICS drove huge raw materials consumption. This time around Goldman says that the green industrial revolution will create a “capex cycle” on part with what happened to emerging markets in the 2000s.

FINSUM: The bank also argues that social and tax policies that are favoring income redistribution to poorer households is bullish for commodities since those households tend to spend a higher percentage of it.

Published in Eq: Energy
Monday, 08 March 2021 17:35

Goldman Sachs Bullish on Commodities Market

(New York)

Jeffrey Currie, head of Commodities Research at Goldman Sachs, said there is the beginning of a structural bull market in raw materials…View the full article on our partner Magnifi’s site

Published in Eq: Energy
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